Fed Rate-Cut Hopes Heighten as Wall Street Inches Up for Anticipated Speeches

A Trader Works on the NYSE: Wall Street Indexes Rise

November 6, 2023

Wall Street’s main indexes saw slight gains on Monday, with the Dow Jones Industrial Average up 0.16%, the S&P 500 up 0.15%, and the Nasdaq Composite up 0.29%. This positive momentum comes as investors eagerly await statements from policymakers later in the week, which will shed light on whether the Federal Reserve will cut interest rates in the coming year.

Last week, U.S. equities had their strongest performance in about a year, bolstered by falling Treasury yields following a disappointing monthly payrolls report. This prompted speculation that the Fed may begin slashing rates in 2024.

Currently, traders are predicting a 90% chance that the Fed will hold rates steady in December, but an 80% chance of a rate cut as early as June next year, according to the CME Group’s FedWatch tool.

This week, market participants will closely watch speeches from several Fed policymakers, including Chair Jerome Powell, New York Fed Chief John Williams, and Dallas Fed President Lorie Logan. These remarks will provide crucial insight into the Fed’s stance on inflation and interest rates.

“The trend continues to align with the Fed’s objectives in terms of inflation,” noted Art Hogan, chief market strategist at B. Riley Wealth. “This is positive for the Fed’s ability to maintain their target of 2% inflation without harming the economy or the labor market.”

Meanwhile, the benchmark ten-year Treasury note yield, which dropped to five-week lows on Friday, ticked up to 4.6431% on Monday. Analysts anticipate that the Treasury’s upcoming auction of approximately $112 billion in three- and ten-year notes and 30-year bonds will provide further insight into investor sentiment.

This week’s economic calendar is relatively light, with only weekly jobless claims data on Thursday and the University of Michigan’s consumer sentiment report on Friday.

In terms of earnings, major companies such as Walt Disney, Instacart, and Biogen will report their latest financial results. So far, 81.6% of S&P 500 companies have exceeded analyst estimates for third-quarter profits, according to LSEG data.

With seven out of eleven major S&P 500 sectors experiencing gains, the technology and consumer discretionary sectors led the way.

At 11:57 a.m. ET, the Dow Jones Industrial Average stood at 34,114.31, up 52.99 points. The S&P 500 was at 4,365.06, up 6.72 points. The Nasdaq Composite reached 13,517.73, up 39.45 points.

In individual stock news, Dish Network’s shares fell 22.1% after the company missed revenue estimates for the third quarter and announced that CEO Erik Carlson would be stepping down. Dating app operator Bumble also experienced a 5.7% slide as founder Whitney Wolfe Herd announced she would be stepping down as CEO.

Declining issues outnumbered advancers on both the NYSE and the Nasdaq. The S&P index saw nine new 52-week highs and no new lows, while the Nasdaq recorded 23 new highs and 64 new lows.

Reporting by Amruta Khandekar and Shristi Achar A; Editing by Maju Samuel


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